Coca-Cola and Microsoft have joined forces in a major five-year strategic partnership. This move is aimed at driving artificial intelligence (AI) innovation across the global beverage giant’s operations.

The two corporate powerhouses announced the $1.1 billion agreement on April 23, with Coca-Cola naming Microsoft as its “globally preferred and strategic cloud and AI platform.” The deal significantly expands on an earlier $250 million partnership the companies established back in 2020.

Coca-Cola has shown confidence in Microsoft’s cutting-edge AI technologies like the Azure OpenAI Service and Copilot for Microsoft 365. The companies plan to collaboratively experiment with these generative AI tools to develop pioneering new use cases across Coca-Cola’s sprawling business divisions..

“Through our long-term partnership, we’ve made significant progress to accelerate systemwide AI transformation across The Coca-Cola Company and its network of independent bottlers worldwide,” said Judson Althoff, Microsoft’s executive vice president and chief commercial officer. “We’re proud to support Coca-Cola as it continues to embrace the era of AI,” he added.

One key initiative will be testing how Copilot’s AI capabilities could boost workplace productivity for Coca-Cola employees worldwide by assisting with tasks like data analysis, writing, and research synthesis. The companies also plan to explore using AI-powered digital assistants built on Azure OpenAI to enhance customer service, streamline operations, spur innovation, and identify new growth opportunities.

Coca-Cola has already been an early mover in generative AI adoption over the past year. The company appointed Pratik Thakar as its first global head of generative AI in 2023 and has leveraged the Azure OpenAI Service for experimental projects spanning marketing, manufacturing, supply chain management, and more.

“Our expanded partnership with Microsoft is an important next chapter in Coca-Cola’s journey toward a digital-first enterprise powered by emerging technologies,” said Neeraj Tolmare, Coca-Cola’s SVP and global chief information officer. “Microsoft’s capabilities help accelerate our adoption of AI to create incremental enterprise value,” he further explained.

The partnership reflects Coca-Cola’s aggressive push to integrate AI capabilities across its global operations and product portfolio. Last year, the company launched Coca-Cola Y3000, which it billed as the first beverage flavor co-created by humans and AI. It has also employed generative AI for innovative marketing campaigns connecting with consumers in new ways.

As part of the deal, Coca-Cola is migrating all its applications to Microsoft’s Azure cloud computing platform, with most major bottling partners following suit. The agreement gives Coca-Cola expanded access to Microsoft’s suite of cloud services and productivity tools like Microsoft 365, Power BI, Dynamics 365, Defender, and Fabric.

“This new agreement builds on the success of Coca-Cola’s partnership strategy with Microsoft, showing our commitment to ongoing digital transformation,” said John Murphy, Coca-Cola’s president and chief financial officer.

The Coca-Cola-Microsoft deal underscores how legacy corporations are increasingly looking to leverage generative AI’s potential to drive innovation, efficiency gains, and new customer experiences.